Validating small gifts to increase response rate

There is an old joke that actually got turned into a Robert Redford/Demi Moore/Woody Harrelson movie. It is potentially off-color for some readers, so if you think you might be one of those readers, skip down past the image of the movie poster below and you will be fine.

A woman goes up to a man in a bar and asks him “Would you have sex with me for a million dollars?”

The man ponders this for a moment and replies that he would.

She then asks “Well, how about for $5?”

He is shocked, retorting “What kind of a person do you think I am?”

She smiles and says “We’ve established what kind of a person you are; now we’re negotiating price.”

The lesson from the above, other than it’s less funny to read written jokes than to hear them told, is that it’s better to get someone to decide how much to donate, rather than to have them deciding whether to make a donation or not.

Researchers have found in several studies that rather than talking about a million dollars, you can have success by talking about a penny – specifically, the phrase “even a penny would help.”

This technique has some impressive results. One study of this in a face-to-face environment increased giving from 28% to 50%.

One could argue that the success of March of Dimes in their original launch was in part a variant of this. Although a dime meant much more then, it still was a way of giving permission to lower level gifts.

The phrase fails Kant’s categorical imperative: if everyone did it, it actually would not help. Your penny would be eaten up by credit card fees, postage, and acknowledgments. And I have not used this technique extensively because I’ve been worried about the anchoring effect. My concern has been that while response rate may go up, average gift would plummet and, as a result, we’d have more lower-value donors instead of fewer high-value donors. The former can be a strategy, but isn’t the one I’ve traditionally aimed for.

But the evidence is that people actually give significantly more than a penny. While gift did go down on average, the total revenue from the canvass went up 64% because of the increase in response rate.

Since revenue per communication is usually a pretty good way of measuring its success (in an ideal world, you’d want to measure its impact on lifetime value, but on a one-year time horizon, you go with what you have), I would call this a win.

I would go one step further in this to say that this technique would be best combined with others to give a reason for why a penny would help. Potentially pairs I see:

With membership: we want to have as many members as possible so we have the political clout to pass legislation.

With petitions: as we’ve seen, the humble petition can be very effective. And the petition can make the “even a penny” part of the pitch be secondary: “please return your petition today; your voice is vital to this important issue. And if you could also send a donation – even a penny – it would help move this issue forward even more.”

Here at Direct to Donor, we don’t even need a penny; what we would love is if you would sign up for the weekly newsletter that has a digest of this type of information, plus special bonus content each week. Thanks in advance.